HONG KONG Jan 11 China Shenhua Energy Co Ltd
, the country's largest coal producer, said
on Friday that it has won the auction of a shale gas block in
southern China as part of its efforts to further integrate its
Shenhua Geological Exploration Company, a wholly owned unit
of Shenhua Energy, has won the tender for the
1,189-square-kilometre Baojing Shale Gas Block in Hunan province
via an auction held by the Chinese government last year, it said
in a filing with the Hong Kong bourse.
The move was part of the state-owned giant's strategy to
"broaden its presence in the energy market and optimise its
business model as an integrated energy company," said Shenhua
Energy, which also owns power plants and railways and ports.
Shenhua also announced on Friday that it had won official
approval to build a 3.28 billion yuan ($527 million) thermal
power plant in the northwestern region of Xinjiang.
Big state Chinese power firms have been named among the
winners of the country's second shale gas auction, the Ministry
of Land and Resources said announced in December.
Non-oil companies may have won most of the blocks offered in
China's second shale gas auction, media and industry officials
have said, which may mean lucrative opportunities for service
companies such as Schlumberger, Halliburton and
China's Anton Oilfield Services Group.
China, the world's top energy user, has yet to start
large-scale shale production, but is believed to hold the
world's largest reserves of the gas, trapped in rocks and
requiring a technology called hydraulic fracturing, or fracking,
Shenhua said it will invest 874 million yuan ($140.42
million) in the exploration of the shale gas block over three
years, but it also cautioned against investment risks.
"The shale gas exploration and development is in the
preliminary stage in China. There are uncertainties in the
exploration achievements of and the development prospects for
shale gas resources in the Baojing Block," it said.